Friday, April 9, 2010

Goldman Sachs Group Inc. (NYSE: GS): Q1 Earnings Preview 2010

Goldman Sachs is scheduled to release Q12010 earnings before the opening bell on Tuesday, April 20, 2010. Analysts, on average, expect the company to report earnings of $4.02 per share in the first quarter with estimates ranging from a low of $3.33 to a high of $4.45 per share. Revenues for the quarter are estimated to be $11.19 billion. In Q12009, the company reported earnings of $3.39 per share on revenue of $9.43 billion. In the previous four quarters, GS has beaten Wall Street estimates by huge margins, reporting increasing EPS in every quarter.

The Goldman Sachs Group, Inc., together with its subsidiaries, provides various investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide.

In the preceding Q42009, the New York-based company reported that it swung to a profit of $4.95 billion, or $8.20 a share, compared to a loss of $2.12 billion, or $4.97 a share, in the prior-year quarter. Revenue totaled $9.615 billion, compared to negative revenues of $1.578 billion in the fourth quarter of 2008. Analysts, on average, expected the company to report earnings of $5.20 per share on revenue of $9.65 billion.

Goldman was the most popular bank for advising clients involved in mergers and acquisitions -- up from No. 3 last year, according to data tracker Dealogic’s data. Goldman was involved in six of the 10 largest mergers and acquisitions of the first quarter of 2010 -- including the largest one, the sale of one of AIG's largest insurance businesses, Dealogic said. The bank was involved in 61 deals altogether and won 10% of the revenue in the sector.The bank came in second in the rankings of firms in the capital markets sector, which includes underwriting stock offerings. That was up from eighth last year.

However, the company's public image has taken a serious hit in recent times amid a wave of withering criticism of its business practices. More recently, Goldman has come under scrutiny following reports that it helped Greece conceal its debt levels in 2001 through a series of complex derivatives deals. It recently said in its annual report that "adverse publicity," bad PR, could pose a risk to its bottom line.

In a letter to shareholders, the company recently refuted allegations that it profited improperly from the state rescue of insurance giant AIG and that it took positions against clients to whom it had sold high-risk property assets.

In terms of stock performance, Goldman Sachs shares have gained nearly 1 percent since the beginning of the year.

Full Disclosure: None.

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